The following discussion and analysis provide information that management
believes is relevant to an assessment and understanding of our results of
operations and financial condition. Unless the context otherwise requires,
references in this "Management's Discussion and Analysis of Financial Condition
and Results of Operations" to "we," "us," "our," and "the Company" are intended
to mean the business and operations of CuriosityStream.



Caution Regarding Forward-Looking Statements



All statements other than statements of historical fact included in this
Quarterly Report on Form 10-Q including, without limitation, statements under
this "Management's Discussion and Analysis of Financial Condition and Results of
Operations" regarding the Company's financial position, business strategy and
the plans and objectives of management for future operations, are
forward-looking statements. When used in this Quarterly Report on Form 10-Q,
words such as "anticipate," "attribute," "believe," "continue," "hope,"
"estimate," "expect," "intend," "may," "might," "potential," "seek," "should,"
"will" and "would," and similar expressions, as they relate to us or the
Company's management, identify forward-looking statements. Such forward-looking
statements are based on the beliefs of management, as well as assumptions made
by, and information currently available to, the Company's management. Actual
results could differ materially from those contemplated by the forward-looking
statements as a result of certain factors detailed in our filings with the SEC.
All subsequent written or oral forward-looking statements attributable to us or
persons acting on the Company's behalf are qualified in their entirety by this
paragraph. These forward-looking statements are subject to risks and
uncertainties that could cause actual results and events to differ materially
from those included in forward-looking statements. Factors that might cause or
contribute to such differences include, but are not limited to, those discussed
in our Annual Report on Form 10-K for the year ended December 31, 2021, filed
with the Securities and Exchange Commission ("SEC") on March 31, 2022, and our
Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 filed with
the SEC on May 16, 2022. We assume no obligation to revise or publicly release
any revision to any forward-looking statements contained in this Quarterly
Report on Form 10-Q, unless required by law.



Overview



CuriosityStream is a media and entertainment company that offers premium video
programming across the principal categories of factual entertainment, including
science, history, society, nature, lifestyle and technology.  Our mission is to
provide premium factual entertainment that informs, enchants and inspires.  We
are seeking to meet demand for high-quality factual entertainment via SVoD
platforms, as well as via bundled content licenses for SVoD and linear
offerings, partner bulk sales, brand partnerships and content sales.  We believe
we are well-positioned for growth as a digital-native video platform monetizing
content across this broad revenue stack.



We operate our business as a single operating segment that provides premium
streaming content through multiple channels, including the use of various
applications, partnerships and affiliate relationships. We generate our revenue
through six products and services: Direct to Consumer Business, Partner Direct
Business, Bundled Distribution, Program Sales, Corporate & Association
Partnerships and Other. The table below shows our revenue generated through each
of the foregoing products and services for the three and six months ended June
30, 2022 and 2021:



                                 Three Months Ended June 30,                       Six Months Ended June 30,
                                 2022                    2021                    2022                    2021

Direct to Consumer
(Subscriptions - O&O
and App Services)        $   7,363         33 %   $  5,647         37 %   $ 14,554         36 %   $ 10,462         41 %
Partner Direct
Business (License
Fees - Affiliates)           1,191          5 %      1,041          7 %      2,334          6 %      2,018          8 %
Bundled Distribution
(License
Fees - Affiliates)           3,888         18 %      3,538         23 %      7,655         19 %      7,064         28 %
Program Sales                6,655         30 %      5,031         33 %     10,904         27 %      5,517         22 %
Corporate &
Association
Partnerships
(Subscriptions - O&O
Service)                     1,559          7 %         33          0 %      2,722          7 %         95          0 %
Other                        1,692          7 %         54          0 %      1,806          5 %        124          1 %

Total Revenues           $  22,348                $ 15,344                $ 39,975                $ 25,280




CuriosityStream's award-winning content library features more than 15,000
programs that explore topics ranging from space engineering to ancient history
to the rise of Wall Street. Our extensive catalog of originally produced and
owned content includes more than 9,500 short-, mid- and long-form video and
audio titles, including One Day University and Learn25 recorded lectures that
are led by some of the most acclaimed college and university professors in the
world. Our library also features a rotating catalog of more than 5,500
internationally licensed videos and audio programs. Every month, we launch
dozens of new video titles, which are available on-demand in high- or ultra-high
definition. Through new and long-standing international partnerships, we have
localized a large portion of our video library in ten different languages-so
far.



Our video content is available directly through our O&O Service and App
Services. Our App Services enable access to CuriosityStream on almost every
major consumer device, including streaming media players like Roku, Apple TV and
Amazon Fire TV, all major smart TV brands (e.g., LG, Vizio, Samsung, Sony) and
gaming consoles like Xbox.  Our Direct Service is available to any household in
the world with a broadband connection for $2.99 per month or $19.99 per year.
We also provide a premium service for $9.99 per month or $69.99 per year. Our
Premium membership includes everything in our standard service, plus
subscriptions to third-party platforms Tastemade, Topic, and SommTV, our equity
investee Nebula, and our new service, One Day University.



                                       20





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


In addition to our Direct to Consumer Business and Partner Direct Business, we
have affiliate relationships with our Bundled MVPD Partners and MVPDs, which are
broadband and wireless companies in the U.S. and international territories to
whom we can offer a broad scope of rights, including 24/7 "linear" channels, our
on-demand content library, mobile rights and pricing and packaging flexibility,
in exchange for an annual fixed fee or fee per subscriber.



In our Program Sales Business, we sell to certain media companies a collection
of our existing titles in a traditional program sales deal. We also sell
selected rights (such as in territories or on platforms that are lower priority
for us) to content we create before we even begin production. This latter model
reduces risk in our content development decisions and creates program sales
revenue.



Our Corporate & Association Partnerships business is comprised primarily of
selling subscriptions in bulk to companies and organizations that in turn offer
these subscriptions to their employees and members as an employment benefit or
"gift of curiosity." To date, over 27 companies have purchased annual
subscriptions at bulk discounts for their employees.



Our Other business is primarily comprised of advertising and sponsorship
revenue.  We offer companies the opportunity to be associated with
CuriosityStream content in a variety of forms, including short and long form
program integration, branded social media promotional videos, advertising spots
in our video and audio programs that are made available in front of the paywall,
and digital display ads.


Key Factors Affecting Operating Results

Our operating results and future cash flows depend on a number of opportunities, challenges and other factors, including our ability to effectively grow our subscriber base and expand our service offerings to maximize the lifetime value of subscribers. In particular, we believe that the following factors have had a material impact on our results of operations during the periods set out below and are expected to continue to have such a material effect:



Revenues



Currently, the main sources of our revenue are (i) subscriber fees from the
Direct to Consumer Business and Direct Subscribers, (ii) subscriber fees from
Corporate & Association Partnerships, (iii) license fees from affiliates who
receive subscriber fees for CuriosityStream from such affiliates' subscribers
("Partner Direct Business" and "Partner Direct Subscribers"), (iv) license fees
from bundled license fees from distribution affiliates ("Bundled MVPD Business"
and "Bundled MVPD Subscribers"), (v) license fees from program sales
arrangements, and (vi) Other revenue, including advertising and sponsorships. As
of June 30, 2022, we had approximately 25 million total paying subscribers,
including Direct Subscribers, Partner Direct Subscribers, Bundled MVPD
Subscribers and Corporate & Association Partnerships subscribers.



                                       21




Since our founding in 2015, we have generated a significant portion of our
revenues from Direct Subscribers in the form of monthly or annual subscription
plans. We may in the future increase the price of our subscription plans, which
may have a positive effect on our revenue from this line of our business. The
MVPD, vMVPD and digital distributor partners making up our Partner Direct
Business pay us a license fee. We recognize subscription revenues ratably during
each subscriber's monthly or yearly subscription period. We pay a fixed
percentage distribution fee to our partners for subscribers accessing our
platform via App Services to compensate these partners for access to their
customer and subscriber bases. Our MVPD, vMVPD and digital distributor partners
host and stream our content to their customers via their own platforms, such as
set top boxes in the case of most MVPDs. We do not incur billing, streaming or
backend costs associated with content distribution through our MVPD, vMVPD and
digital distributor partners.



Operating Costs



Our primary operating costs relate to the cost of producing and acquiring our
content, the costs of advertising and marketing our service, personnel costs,
and distribution fees. Producing and co-producing content and commissioned
content is generally more costly than content acquired through licenses.



The Company's business model is subscription based as opposed to a model
generating revenues at a specific title level. Content assets (licensed and
produced) are predominantly monetized as a group and therefore are reviewed in
aggregate at a group level when an event or change in circumstances indicates a
change in the expected usefulness of the content or that the fair value may be
less than unamortized cost. If such changes are identified, the aggregated
content library will be stated at the lower of unamortized cost or fair value.
In addition, unamortized costs for assets that have been, or are expected to be,
abandoned are written off. For a discussion of the accounting policies for
content impairment write-down and management estimates involved therein, see "-
Critical Accounting Policies and Estimates" below.



Further, our advertising and marketing expenditures and personnel costs
constitute primary operating costs for our business. These costs may fluctuate
based on advertising and marketing objectives and personnel needs. In general,
we have been and intend to continue to focus marketing dollars on efficient
customer acquisition. With respect to personnel costs, we focus on
revenue-generating personnel, such as sales staff and roles that support the
improvement, maintenance and marketing of our Direct Service.



                                       22





Results of Operations



The financial data in the following table sets forth selected financial
information derived from our unaudited consolidated financial statements for the
three and six months ended June 30, 2022 and 2021 and shows our results of
operations as a percentage of revenue or as a percentage of costs, as
applicable, for the periods indicated. We conduct business through one operating
segment, CuriosityStream.


Comparison of the three months ended June 30, 2022 and 2021



                                           Three months ended June 30,
                                          2022                     2021              $ Change      % Change
                                                   (unaudited)
                                                 (in thousands)
Revenues
Subscriptions                     $   8,922         40 %   $   5,680         37 %   $    3,242            57 %
License fee                          11,734         52 %       9,610         63 %        2,124            22 %
Other                                 1,692          8 %          54          0 %        1,638           n/m
Total Revenues                    $  22,348        100 %   $  15,344        100 %   $    7,004            46 %
Operating expenses
Cost of revenues                     12,988         34 %       5,722         22 %        7,266           127 %
Advertising and marketing            11,208         29 %      11,520         44 %         (312 )          (3 %)
General and administrative           10,603         28 %       9,153         34 %        1,450            16 %
Impairment of goodwill and
intangible assets                     3,603          9 %           -          0 %        3,603           n/m
Total operating expenses          $  38,402        100 %   $  26,395        100 %   $   12,007            45 %
Operating loss                      (16,054 )                (11,051 )                  (5,003 )          45 %
Other income (expense)
Change in fair value of warrant
liability                               478                    1,764                    (1,286 )         (73 %)
Interest and other (expense)
income                                  (29 )                  1,036                    (1,065 )         n/a
Equity interests loss                  (316 )                      -                      (316 )         n/m
Loss before income taxes          $ (15,921 )              $  (8,251 )              $   (7,670 )          93 %
Provision for income taxes               56                       53                         3             6 %
Net loss                          $ (15,977 )              $  (8,304 )              $   (7,673 )          92 %



n/m – insignificant percentage


Revenue


Revenue for the three months ended June 30, 2022 and 2021 was $22.3 million and
$15.3 million, respectively. The increase of $7.0 million, or 46%, is due to a
$3.2 million increase in subscription revenue, a $2.1 million increase in
license fee revenue and a $1.6 million increase in other revenue.



The increase in subscription revenue of $3.2 million resulted primarily from a
$1.6 million increase in subscriber fees received from Direct Subscribers for
annual and monthly plans and a $1.3 million increase in corporate subscriptions
related to the bulk agreements executed in the last quarter of 2021. The
increase in license fees of $2.1 million resulted primarily from a $1.6 million
increase in license fees related to a larger volume of program sales
arrangements and a $0.5 million increase in bundled distribution due to new
agreements launched in the second half of 2021. The increase in other revenue of
$1.6 million is primarily due to revenue generated in the current quarter
related to an advertising agreement with an affiliate.



Operating Expenses



Operating expenses for the three months ended June 30, 2022 and 2021 were $38.4
million and $26.4 million, respectively. This increase of $12.0 million, or 45%,
primarily resulted from the following:



Cost of Revenues: Cost of revenues for the three months ended June 30, 2022
increased to $13.0 million from $5.7 million for the three months ended June 30,
2021. Cost of revenues primarily includes content amortization, hosting and
streaming delivery costs, payment processing costs and distribution fees,
commission costs and subtitling and broadcast costs. This increase of
$7.3 million, or 127%, is primarily due to the increase in content amortization
of $5.8 million, which is primarily driven by the increase in program sales
arrangements resulting in significant accelerated amortization, as well as an
increase in the number and cost of titles published during the three months
ended June 30, 2022 compared to the three months ended June 30, 2021. The
balance of the increase in cost of revenues is primarily due to a $1.3 million
increase in revenue share expense related to bundled and premier tier
arrangements with other streaming services as well as cost of advertising and an
increase of $0.2 million in sales commissions, subtitling and broadcast costs.





                                       23





Advertising & Marketing: Advertising and marketing expenses for the three months
ended June 30, 2022, decreased to $11.2 million from $11.5 million for the three
months ended June 30, 2021. This decrease of $0.3 million, or 3% is primarily
due to a decrease in digital advertising, partner platforms and agency fees of
$2.5 million, partially offset by an increase of $2.2 million in radio and TV
advertising compared to the prior year period.



General and Administrative: General and administrative expenses for the three
months ended June 30, 2022 increased to $10.6 million from $9.2 million for the
three months ended June 30, 2021. This increase of $1.4 million, or 16%, is
primarily attributable to incremental salaries and benefits.



Impairment of Goodwill and Intangible Assets:The increase of $3.6 million in
operating expenses for the three months ended June 30, 2022 was the result of
the impairment analysis performed during the current quarter. The analysis
resulted in an impairment charge of $0.8 million related to intangible assets
and an impairment charge against the entire balance of goodwill for $2.8
million. There were no such impairment charges recorded during the three months
ended June 30, 2021.



Operating Loss


Operating loss for the three months ended June 30, 2022 and 2021 was $16.1
million and $11.1 million, respectively. The increase of $5.0 million, or 45%,
in operating loss resulted from the increase in operating expenses of $12.0
million, or 45%, including the impairment of goodwill and intangible assets of
$3.6 million, offset by an increase in revenue of $7.0 million, or 46%, in each
case during the three months ended June 30, 2022 compared to the three months
ended June 30, 2021, as described above.



Change in fair value of warrant liability



For the three months ended June 30, 2022, the Company recognized a $0.5 million
gain compared to a gain of $1.8 million recognized during the three months ended
June 30, 2021, each resulting from a decrease in the fair value of the
liabilities related to the Private Placement Warrants for the respective
periods.



Interest and other income (expenses)



Interest and other income (expense) for the three months ended June 30, 2022 was
less than $0.1 million expense compared to $1.0 million in income for the three
months ended June 30, 2021, primarily due to greater interest income from debt
investments in the prior year period.



Equity Interests Loss


For the three months ended June 30, 2022the Company has recorded $0.3 million
loss of interests related to interests in Spiegel Venture and Nebula with no income or loss of comparable interests during the three months ended June 30, 2021.



Provision for Income Taxes



Due to generating a loss before income taxes in each of the three months ended
June 30, 2022 and 2021, we had a provision for income taxes of $56 thousand and
$53 thousand, respectively. This slight increase of $3 thousand, or 6%, was
primarily due to an increase in foreign withholding tax expense due to an
increase in contracts executed with parties in foreign jurisdictions. The
Company's 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 benefit for either federal or state income tax purposes.

                                       24





Net Loss



Net loss for the three months ended June 30, 2022 and 2021 was $16.0 million and
$8.3 million, respectively. The increase of net loss of $7.7 million, or 92%, is
due to the increase in total operating expenses of $12 million, or 45%,
consisting primarily of the increase in cost of revenues and goodwill and
intangible assets impairment charges, the $1.3 million decrease in the gain
related to the change in the fair value of the warrant liability, and the $1.1
million decrease in interest and other (expense) income, partially offset by the
increase in total revenues of $7.0 million or 46%, in each case during the three
months ended June 30, 2022 compared to the three months ended June 30, 2021, as
described above.


Comparison of the six months ended June 30, 2022 and 2021



                                     Six months ended June 30,
                                 2022                        2021                $ Change       % Change
                                            (unaudited)
                                          (in thousands)
Revenues
Subscriptions           $  17,276            43 %   $  10,557            42 %   $    6,719             64 %
License fee                20,893            52 %      14,599            58 %        6,294             43 %
Other                       1,806             5 %         124             0 %        1,682            n/m
Total Revenues          $  39,975           100 %   $  25,280           100 %   $   14,695             58 %
Operating expenses
Cost of revenues           24,838            33 %       9,880            19 %       14,958            151 %
Advertising and
marketing                  25,976            34 %      23,769            46 %        2,207              9 %
General and
administrative             21,106            28 %      17,885            35 %        3,221             18 %
Impairment of
goodwill and
intangible assets           3,603             5 %           -             0 %        3,603            n/m
Total operating
expenses                $  75,523           100 %   $  51,534           100 %   $   23,989             47 %
Operating loss            (35,548 )                   (26,254 )                     (9,294 )           35 %
Other income
(expense)
Change in fair value
of warrant liability        4,338                      (2,022 )                      6,360            n/m
Interest and other
(expense) income              (86 )                     1,296                       (1,382 )          n/m
Equity interests loss        (472 )                         -                         (472 )          n/m
Loss before income
taxes                   $ (31,768 )                 $ (26,980 )                 $   (4,788 )           18 %
Provision for income
taxes                         101                          79                           22             28 %
Net loss                $ (31,869 )                 $ (27,059 )                 $   (4,810 )           18 %



n/m – insignificant percentage


Revenue


Turnover for the half-year ended June 30, 2022 and June 30, 2021 has been $40.0 million and $25.3 million, respectively. The raise of $14.7 millioni.e. 58%, is due to a $6.7 million increase in subscription revenue, a $6.3 million
the increase in revenue from license fees and a $1.7 million increase in other income



The increase in subscription revenue of $6.7 million resulted primarily from a
$4.1 million increase in subscriber fees received from Direct Subscribers for
annual and monthly plans and a $2.6 million increase in corporate subscriptions
related to subscription bulk agreements. The increase in license fees of $6.3
million resulted primarily from a $5.3 million increase in license fees related
to a larger volume of program sales arrangements, a $0.6 million increase in
bundled distribution due to new agreements launched in the second half of 2021
and a $0.4 million increase in Partner Direct revenues due to increased
subscribers to our partner's respective platforms.



Operating Expenses



Operating expenses for the six months ended June 30, 2022 and 2021 were $75.5
million and $51.5 million, respectively. This increase of $24.0 million, or 47%,
primarily resulted from the following:



Cost of Revenues: Cost of revenues for the six months ended June 30, 2022
increased to $24.8 million from $9.8 million for the six months ended June 30,
2021. Cost of revenues primarily includes content amortization, hosting and
streaming delivery costs, payment processing costs and distribution fees,
commission costs and subtitling and broadcast costs. This increase of
$15.0 million, or 151%, is primarily due to the increase in content amortization
of $12.2 million, which is primarily driven by the increase in program sales
arrangements resulting in significant accelerated amortization, as well as an
increase in the number and cost of titles published during the six months ended
June 30, 2022 compared to the six months ended June 30, 2021. The balance of the
increase in cost of revenues is primarily due to a $2.5 million increase in
revenue share expense related to bundled and premier tier arrangements with
other streaming services and an increase of $0.3 million in subtitling and
broadcast costs.



                                       25





Advertising & Marketing: Advertising and marketing expenses for the six months
ended June 30, 2022, increased to $26.0 million from $23.8 million for the six
months ended June 30, 2021. This increase of $2.2 million, or 9%, is primarily
due to an increase in radio advertising of $5.6 million and an increase in
digital advertising of $0.6 million, partially offset by a decrease of $4.0
million in partner platforms, TV advertising and agency fees compared to the
prior year period.


General and Administrative: General and administrative expenses for the six
months ended June 30, 2022 increased to $21.1 million from $17.9 million for the
six months ended June 30, 2021. This increase of $3.2 million, or 18%, is
primarily attributable to $2.2 million for incremental salaries and benefits as
well as smaller increases to various other expense categories, including
licenses and subscriptions and professional fees.



Impairment of Goodwill and Intangible Assets:The increase of $3.6 million in
operating expenses for the six months ended June 30, 2022 is the result of the
impairment analysis performed as of June 30, 2022. The analysis resulted in an
impairment charge of $0.8 million related to intangible assets and an impairment
charge against the entire balance of goodwill for $2.8 million. There were no
such impairment charges recorded during the six months ended June 30, 2021.

Operating Loss



Operating loss for the six months ended June 30, 2022 and 2021 was $35.6 million
and $26.3 million, respectively. The increase of $9.3 million, or 35%, in
operating loss resulted from the increase in operating expenses of $24.0
million, or 47%, including the impairment of goodwill and intangible assets of
$3.6 million, offset by an increase in revenue of $14.7 million, or 58%, in each
case during the six months ended June 30, 2022 compared to the six months ended
June 30, 2021, as described above.



Change in fair value of warrant liability



For the six months ended June 30, 2022, the Company recognized a $4.3 million
gain related to the decrease in the fair value of the liability related to
Private Placement Warrants, compared to a loss of $2.2 million recognized during
the six months ended June 30, 2021, which was due to an increase in the fair
value of the liability related to the Private Placement Warrants in the prior
period.


Interest and other income (expenses)

Interest and other income (expense) for the six months ended June 30, 2022 was a
$0.1 million expense compared to $1.3 million in income for the six months ended
June 30, 2021, primarily due to greater interest income from investments in
the
prior year period.



Equity Interests Loss


For the six months ended June 30, 2022the Company has registered $0.5 million loss of interests related to interests in Spiegel Venture and Nebula with no income or loss of comparable interests during the six months ended June 30, 2021.



Provision for Income Taxes



Due to generating a loss before income taxes in each of the six months ended
June 30, 2022 and 2021, we had a provision for income taxes of $101 thousand and
$79 thousand, respectively. This increase of $22 thousand, or 28%, was primarily
due to an increase in foreign withholding tax expense due to an increase in
contracts executed with parties in foreign jurisdictions. The Company's
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 benefit for either federal or state income tax purposes.



                                       26





Net Loss


Net loss for the six months ended June 30, 2022 and 2021 was $31.9 million and
$27.1 million, respectively. The increase of net loss of $4.8 million, or 18%,
is primarily due to the increase in total operating expenses of $24.0 million,
or 47%, consisting of the increase in cost of revenues and goodwill and
intangible assets impairment charges, and the $1.4 million decrease in interest
and other (expense) income, partially offset by the increase in total revenues
of $14.7 million or 58% and the increase in gain related to the change in fair
value of the warrant liability of $6.4 million, in each case during the six
months ended June 30, 2022 compared to the six months ended June 30, 2021,
as
described above.


Cash and capital resources

As of June 30, 2022, we had cash and cash equivalents, including restricted
cash, of $23.3 million. In addition, the Company had available for sale
investments in debt securities totaling $54.5 million, all of which were
classified as short-term investments. All of the Company's investments in debt
securities can be readily converted to cash to meet the Company's ongoing
operating cash flow needs. For the six months ended June 30, 2022, we incurred a
net loss of $31.9 million and used $18.1 million of net cash in operating
activities, while investing activities provided $24 million of net cash, and
financing activities used $0.2 million of net cash.



We believe that our current cash levels and our investments in debt securities readily convertible to cash will be sufficient to support our ongoing operations, capital expenditures and working capital for at least the next twelve months.



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



Cash Flows


The following table shows our cash flows from operating, investing and financing activities for the six months ended June 30, 2022 and 2021:


                                                                         For the
                                                                     six months ended
                                                                         June 30,
                                                                   2022           2021
                                                                       (unaudited)
                                                                      (in thousands)
Net cash used in operating activities                            $ (18,149 )   $  (23,356 )
Net cash provided by (used in) investing activities                 24,024       (128,957 )
Net cash (used in) provided by financing activities                   (161 )      148,679
Net increase (decrease) in cash, cash equivalents and
restricted cash                                                  $   5,714     $   (3,634 )



Cash flow from operating activities



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


During the six months ended June 30, 2022 and 2021, we recorded a net cash
outflow from operating activities of $18.2 million and $23.4 million,
respectively, or a decreased outflow of $5.2 million, or 22%. The decreased cash
outflow from operating activities was primarily due to increased collections of
our accounts receivable of $15.4 million, increase in the volume of our accounts
payable outstanding of $4.4 million, increase in the amortization of content
assets of $12.1 million, increase in other assets of $3.9 million, and the
impairment of goodwill and intangibles of $3.6 million during the six months
ended June 30, 2022 compared to the six months ended June 30, 2021. The decrease
in outflow from operating activities was partially offset by increased
investment in content (shown by the change in content liabilities and additions
to content assets) of $11.3 million, and the decrease in deferred revenue change
of $8.6 million for the six months ended June 30, 2022, compared to the six
months ended June 30, 2021.



                                       27




Cash flow from investing activities

Cash flows from investing activities include purchases, sales and maturities of investments, as well as business combinations, equity investments and purchases of property, plant and equipment.

During the six months ended June 30, 2022 and June 30, 2021, we recorded a net
cash inflow from investing activities of $24.0 million and a net cash outflow
from investing activities of $129.0 million, respectively, or a decrease of cash
outflow of $153.0 million, or 119%. The decrease in cash outflow from investing
activities was primarily due to the decrease of the purchases of available for
sale investments of $140.1 million, a net increase in sales and maturities of
those investments of $10.4 million, as well as $1.6 million cash outflows
related to equity investments during the three months ended June 30, 2022 as
compared to $4.0 million cash outflows related to a business combination during
the three months ended June 30, 2021.



Cash flow from financing activities



During the six months ended June 30, 2022 and 2021, we recorded net cash outflow
from financing activities of $0.2 million and a net cash inflow from financing
activities of $148.7 million, respectively. The net cash inflow during the six
months ended June 30, 2021 of $148.7 million was attributable to the receipt of
proceeds from the issuance of common stock of $94.1 million (net of $6.8 million
of underwriting discounts and commissions), the exercise of 4.8 million Public
Warrants resulting in cash proceeds of $54.9 million, and the exercise of stock
options of $0.4 million, partially offset by the payments of transaction costs
related to the issuance of common stock of $0.7 million. There was no comparable
activity during the six months ended June 30, 2022.



Capital Expenditures


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


Off-balance sheet arrangements

Of the June 30, 2022we had no off-balance sheet arrangements.

Significant Accounting Policies and Estimates



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



Content Assets



The Company acquires, licenses and produces content, including original
programming, in order to offer customers unlimited viewing of factual
entertainment content. The content licenses are for a fixed fee and specific
windows of availability. Payments for content, including additions to content
assets and the changes in related liabilities, are classified within "Net cash
used in operating activities" on the unaudited consolidated statements of cash
flows.



The Company recognizes its content assets (licensed and produced) as "Content
assets, net" on the unaudited consolidated balance sheets. For licenses, the
Company capitalizes the fee per title and records a corresponding liability at
the gross amount of the liability when the license period begins, the cost of
the title is known, and the title is accepted and available for streaming. For
productions, the Company capitalizes costs associated with the production,
including development costs, direct costs, and production overhead.



Based on factors including historical and estimated viewing patterns, the
Company previously amortized the content assets (licensed and produced) in "Cost
of revenues" on the unaudited consolidated statements of operations on a
straight-line basis over the shorter of each title's contractual window of
availability or estimated period of use, beginning with the month of first
availability. Starting July 1, 2021, the Company amortizes content assets on an
accelerated basis in the initial two months after a title is published on the
Company's platform, as the Company has observed and expects more upfront viewing
of content, generally as a result of additional marketing efforts. Furthermore,
the amortization of original content is more accelerated than that of licensed
content. We review factors that impact the amortization of the content assets on
a regular basis and the estimates related to these factors require considerable
management judgment. The Company continues to review factors impacting the
amortization of content assets on an ongoing basis and will also record
amortization on an accelerated basis when there is more upfront use of a title,
for instance due to significant program sales.

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The Company's business model is generally subscription based as opposed to a
model generating revenues at a specific title level. Content assets (licensed
and produced) are predominantly monetized as a group and therefore are reviewed
in aggregate at a group level when an event or change in circumstances indicates
a change in the expected usefulness of the content or that the fair value may be
less than unamortized cost. If such changes are identified, the aggregated
content assets will be stated at the lower of unamortized cost or fair value. In
addition, unamortized costs for assets that have been, or are expected to be,
abandoned are written off.


As a result of a sustained decrease in the Company's share price during the six
months ended June 30, 2022, we concluded that a triggering event had occurred
and conducted impairment testing of our content assets. As a result of this
review, we determined no impairment charges were necessary. Refer to the
"Goodwill and intangible assets" section below for further details with respect
to the impairment testing performed by the Company over its goodwill and
definite-lived intangible assets as of June 30, 2022.



Good will and intangible assets

Goodwill represents the excess of the cost of acquisitions over the amount
assigned to tangible and identifiable intangible assets acquired less
liabilities assumed. At least annually, in the fourth quarter of each fiscal
year or more frequently if indicators of impairment exist, management performs a
review to determine if the carrying value of goodwill is impaired. The
identification and measurement of goodwill impairment involves the estimation of
fair value at the Company's reporting unit level, which is the same or one level
below the operating segment level. The Company determined that it has one
reporting unit.



The Company performs an initial assessment of qualitative factors to determine
whether the existence of events and circumstances leads to a determination that
it is more likely than not that the fair value of a reporting unit is less than
its carrying amount. If, after assessing the totality of relevant events and
circumstances, the Company determines that it is more likely than not that the
fair value of the reporting unit exceeds its carrying value and there is no
indication of impairment, no further testing is performed; however, if the
Company concludes otherwise, an impairment test must be performed by estimating
the fair value of the reporting unit and comparing it with its carrying value,
including goodwill.



Intangible assets other than goodwill are carried at cost and amortized over
their estimated useful lives. Amortization is recorded within General and
administrative expenses on the consolidated statements of operations. The
Company reviews identifiable finite-lived intangible assets to be held and used
for impairment whenever events or changes in circumstances indicate that the
carrying value of the assets may not be recoverable. Determination of
recoverability is based on the lowest level of identifiable estimated
undiscounted cash flows resulting from use of the asset and its ultimate
disposition. Measurement of any impairment loss is based on the amount by which
the carrying value of the asset exceeds its fair value.



As a result of a sustained decrease in the Company's share price during the six
months ended June 30, 2022, we concluded that a triggering event had occurred
and conducted impairment testing of our goodwill and intangible assets.



During the three months ended June 30, 2022, the Company experienced a sustained
decrease in its share price, and this triggering event was an indication that it
was more likely than not that the fair value of the Company's single reporting
unit was below its carrying value. The Company performed an interim goodwill
impairment test of its goodwill as of June 30, 2022 and recognized a goodwill
impairment charge of $2.8 million during the three months ended June 30, 2022 as
the fair value of the reporting unit was less than the related carrying value.
This charge is included in impairment of goodwill and intangible assets on the
Company's unaudited consolidated statements of operations.



The determination of the fair value of the Company's reporting unit was based on
a combination of the income and the market approach. The Company applied equal
weighting to each of the approaches in determining the fair value of the
reporting unit. Under the income approach, the Company utilized discounted cash
flows of forecasted future cash flows based on future operational expectations
and discounted these cash flows to reflect their relative risk. The cash flows
used are consistent with those the Company uses in its internal planning, which
reflect actual business trends experienced and the Company's long-term business
strategy. Under the market approach, the Company utilized the guideline public
company method and guideline transaction method to develop valuation multiples
and compare the Company to similar publicly traded companies. The significant
assumptions under each of the approaches include, among others: revenue
projections (which are dependent on future customer subscriptions and content
licensing agreements), operating expenses, discount rate, control premium and a
terminal growth rate. The cash flows used to determine the fair values are
dependent on a number of significant management assumptions, such as the
Company's expectations of future performance and the expected future economic
environment, which are partly based upon the Company's historical experience.
The Company also considered its market capitalization in assessing the
reasonableness of the reporting unit fair value.



During the three months ended June 30, 2022, the Company also determined there
were impairment indicators with respect to certain of the Company's
definite-lived intangible assets. As a result, the Company performed an
impairment test by comparing the carrying values of the intangible assets to
their respective fair values, which were determined based on forecasted future
cash flows. As a result of this impairment test, the Company recorded an
impairment charge of $0.8 million during the three months ended June 30, 2022,
which is reflected as a component of impairment of goodwill and intangible
assets on the Company's unaudited consolidated statements of operations.



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In order to further validate the reasonableness of fair value as determined by
the income and market approaches described above, a reconciliation to market
capitalization is then performed by estimating a reasonable control premium and
other market factors. Future changes in the judgments, assumptions and estimates
that are used in the impairment testing for our asset group could result in
significantly different estimates of fair value.



Revenue Recognition



Subscriptions - O&O Service



The Company generates revenue from monthly subscription fees from its O&O
Service. CuriosityStream subscribers enter into month-to-month or annual
subscriptions with the Company. The Company bills the monthly subscriber on each
subscriber's monthly anniversary date and recognizes the revenue ratably over
each monthly membership period. The annual subscription fees are collected by
the Company at the start of the annual subscription period and are recognized
ratably over the subsequent twelve-month period. Revenues are presented net of
the taxes that are collected from subscribers and remitted to governmental
authorities.



Subscriptions - App Services



The Company also earns subscription revenues through its App Services. These
subscriptions are similar to the O&O Service subscriptions, but are generated
based on agreements with certain streaming media players as well as with Smart
TV brands and gaming consoles. Under these agreements, the streaming media
player typically bills the subscriber directly and then remits the collected
subscriptions to the Company, net of a distribution fee. The Company recognizes
the gross subscription revenues when earned and simultaneously recognizes the
corresponding distribution fees as an expense. The Company is the principal in
these relationships as the Company retains control over service delivery to
its
subscribers.



License Fees - Affiliates



The Company generates license fee revenues from MVPDs such as Altice, Comcast
and Cox as well as from vMVPDs such as Amazon and Sling TV (MVPDs and vMVPDs are
also referred to as affiliates). Under the terms of the agreements with these
affiliates, the Company receives license fees based upon contracted programming
rates and subscriber levels reported by the affiliates. In exchange, the Company
licenses its content to the affiliates for distribution to their subscribers.
The Company earns revenue under these agreements either based on the total
number of subscribers multiplied by rates specified in the agreements or based
on fixed fee arrangements. These revenues are recognized over the term of each
agreement when earned.



License Fees - Program Sales



The Company has distribution agreements which grant a licensee limited
distribution rights to the Company's programs for varying terms, generally in
exchange for a fixed license fee. Revenue is recognized once the content is made
available for the licensee to use.



The Company's performance obligations include (1) access to its SVoD platform
via the Company's O&O Service and App Services, (2) access to the Company's
content assets, and (3) licenses of specific program titles. In contracts
containing the right to access the Company SVoD platform, the performance
obligation is satisfied as access to the SVoD platform is provided post any free
trial period. In contracts which contain access to the Company's content assets,
the performance obligation is satisfied as access to the content is provided.
For contracts with licenses of specific program titles, the performance
obligation is satisfied as that content is made available for the customer
to
use.


Recently released financial accounting standards



The information set forth under Note 2 to the unaudited consolidated financial
statements under the caption "Basis of presentation and summary of significant
accounting policies" is incorporated herein by reference.



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